Safaricom Courts Banks, Credit Unions to Grow Mobile Banking

(Bloomberg) -- Safaricom Plc, Kenya’s largest mobile-phone operator, plans to more than triple the number of mobile banking customers in two years.

Users of the company’s mobile-phone banking platform will probably reach 15 million from 4 million now, with Safaricom subscribers in banks and credit unions driving the growth, Chief Financial Services Officer Sitoyo Lopokoiyit said Tuesday in an interview in the capital, Nairobi. Safaricom has already entered mobile-banking partnerships with all the nation’s 40 operating commercial banks and is signing up credit unions.

Key Highlights

• Safaricom has more than 30 million customers using M-Pesa, its payments platform touted for bringing the unbanked into the financial system. The company is now leveraging its M-Pesa experience to grow a mobile phone-based banking platform in collaboration with lenders and credit unions.
• The company is looking at how it can provide credit unions a “better technology platform to integrate to us,” Lopokoiyit said.
• Safaricom sees credit unions -- membership saving and lending societies -- as a growth driver. Last year, the unions increased their loans 13% to 373 billion shillings ($3.65 billion).
• Safaricom’s service revenue grew 7% to 240.3 billion shillings in the year through March, with M-Pesa’s share increasing to 31.2% and edging closer to matching sales contributions from voice.
• Safaricom introduced anti-fraud intelligence that enables banks to monitor sim-card swaps due to damage or loss, according to Lopokoiyit. The company said fraudulent sim-card swaps, which lead to identity theft had dramatically reduced over the past year.

--With assistance from Eric Ombok.

To contact the reporter on this story: Bella Genga in Nairobi at bgenga2@bloomberg.net

To contact the editors responsible for this story: David Malingha at dmalingha@bloomberg.net, Vernon Wessels

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